Use the Information in the Table (All Times Are in Days)to

question 60

Multiple Choice

Use the information in the table (all times are in days) to determine the lowest extra cost for an 18-day project if the base cost for each activity finished in normal time is $1,000. $$\begin{array} { | l | l | l | l | l | } \hline & \text { Normal } & \text { Minimum } & \text { Crash Cost } & \\ \text { Activity } & \text { Time } & \text { Time } & \text { (\$/day) } & \text { Predecessor } \\\hline \text { A } & 10 & 6 & \$ 70 & - \\\hline \text { B } & 6 & 3 & \$ 40 & - \\\hline \text { C } & 2 & 2 & - & \text { B } \\\hline \text { D } & 4 & 2 & \$ 60 & \text { C } \\\hline \text { E } & 6 & 4 & \$ 80 & \text { A } \\\hline \text { F } & 8 & 5 & \$ 90 & \text { D, E } \\\hline\end{array}$$

• A) $400
• B) $420
• C) $440
• D) $460

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Definitions:

Annual Coupon Bond

A type of bond that pays interest to the bondholder on an annual basis.

Portfolio Value

The total worth of all the financial assets held in an investment portfolio, which can vary over time based on market conditions.

Horizon Analysis

A method used in finance to assess the suitability of investments over different timeframes.

Yield To Maturity

The total return anticipated on a bond if it is held until the date of its maturity, representing an important measure of the bond's potential profitability.